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Agency, Saudia airline tussle over breach of contract

By John Muthoni | December 9th 2013 at 00:00:00 GMT +0300

By John Muthoni

Kenya: Lawyers for an International airline with operations in Kenya have sought more time to reply to an application by a local travel agency, which seeks before the court to have it deposit Sh5 million as security.

Saudi Arabia Airline counsel told High Court Judge Francis Gikonyo that he had not responded to the application, which Express Services Ltd says is going to lose huge money in litigation if the case filed against it is thrown out.

It wants the Sh5 million security to act as relief to mitigate against the loss. Saudi Arabia Airline and Express Services Ltd entered a deal on June 27, 2000 where the agency would sell the airline’s passenger and cargo flight sales.

The General Sales Agency was to give the airline by the end of each month or before consolidated sales a report of all sales of the previous months and would attach an auditor’s report on waybills sold.

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They too were required to remit all the money that they sold the waybills. However, Saudi Arabia Airline cancelled the contract accusing the agent of breach of its part of deal. This is as per the lawyer for the airline Ali Mohammed ended their deal on January 31, last year.

Amongst the issues it raised on cancellation was that Express had failed to promptly reply and dispatch returns after the sales. Moreover it accused the agency of failing to remit more than $3 million (Sh262 million) to the airline.

The airline then moved to court to compel the local agency to pay its dues.

“The defendant had some outstanding accounts payable to the plaintiff of a tune of $3 million and unused 196 way bills, which are a property of the plaintiff,” said Ali in the application.

Ali said the client had lost money due to the breach of contract and was thus seeking remedies and damages.

Express Services Ltd lawyer Ibrahim Nyawara told the court that there was no notice of ending the contract that was given to his client.

Nyawara argued that the plaintiff had unjustly conducted itself to the detriment of Express Services who he says had since incurred losses due to the cancellation of the contract. Saudia Airline denied breach of contract or any loss that had been occasioned by the defendant.

Saudi Arabia Airline Express Services Ltd breach of contract
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